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By Bob Graham
Posted: May 5, 2010

Maryland’s acting insurance commissioner says the process to determine medical loss ratio for health insurers is in the “very early” stages.

Maryland and other states, working with the U.S. Department of Health and Human Services, must determine what to place in the category of medical expenses and what should be deemed administrative or business costs for health insurers. The effort is part of federal health care reform, requiring insurers to spend at least 85% of subscriber premiums on medical expenses in small- and large-group markets, and at least 80% in individual policies.

The new federal mandate differs from Maryland law, which has varying medical loss ratios. Maryland law sets the medical loss thresholds at 60% for individual policies, 75% for small-group policies, 65% for individual Medigap policies and 75% for group Medigap policies.

Proposals before the Maryland General Assembly earlier this year and last year failed to raise the premium dollars to be spent on medical costs to at least 80% in all categories.

The differences between state and federal law could ultimately lead acting Maryland Insurance Commissioner Beth Sammis to act differently from other states, she said.

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